Trial Set To Determine What SCO Owes Novell

BobB-nw writes with word that this April will be the trial date for SCO's financial reckoning. Novell will discover via the courts how much (if anything) SCO is going to be compelled to pay in compensation for the lengthy trial over Unix code rights. The NetworkWorld piece also offers an overview of the case. "In September, The Wall Street Journal described the ruling against SCO as 'a boon to the open source software movement.' But experts say Unix is filled with technology that carries copyrights tied to many different companies and that it would be a nightmare to open source the Unix code collectively. Instead, Novell would have to pick and choose pieces to open-source, a process that could begin once the trial has ended."

Just shut down

[Anonymous Coward]

April is a long time from today. I would simply terminate SCO and end it. Hard to go to court when you do not exist.

Quick question

[MC Negro]

Okay, could someone (more knowledgeable than I) explain how this whole trademark vs. IP thing works? From what I understand, it sounds like Novell owns the underlying IP of Unix, but I also thought The Open Group was in charge of the "UNIX" trademark/certification. So speaking purely hypothetically, say Novell were to get back into the Unix market, would they have to have certification by the Open Group to call it "UNIX"?

I guess my question is bit more far-reaching - what is the relationship between the IP holder v. the trademark holder in these circumstances, and are there any other examples where someone owns the IP of something, but doesn't necessarily own the trademark?

Re:I thought we figured this out

[mikael]

Back in the mid-80's, there was a guy in my home town who started his own high-street company selling home computer products. Unfortunately, he didn't understand the concept of market saturation, so whatever sold well one month, he would buy twice as much the next month. After the sales figures came in, the company was immediately liquidated. Everything was still there - half stacked shelves with the stuff still in delivery boxes. Even the managers notepad had half written accounting notes with a large negative number at the very end underscored in red ink. Everything in the store was given a liquidation sale price - from the street front sign to the executive chair/desk and pen in the managers office.

Perhaps we will see the SCO obelisk auctioned off in Ebay or donated to the Computer History Museum.

Just how much does SCO have?

[Jason Levine]

Their last financial report (July '07, they apparently didn't file one for October '07) said that they had $15.79 million in total assets. This isn't taking into account any other debts. That was down $4 million from the previous quarter. Let's suppose that that drop repeated itself the next two quarters (since we're almost out of the current quarter). That means that SCO would have just under $8 million in total assets. So even if Novell took everything SCO had into possession and all other debtors got nothing, Novell wouldn't come close to recouping the money they were owed from Microsoft's $16.6 million Unix license payment. (To say nothing of Sun's $9.3 million license payment or any other payments.)

Another way to look at how much SCO is worth is to look at their market cap. Back in July, SCOX closed at $1.48 per share. Over 21.25 million shares, that's $31.45 million. Today, they're at $0.09 per share for a market cap of $1,912,500. Novell could easily buy up the remaining pieces of SCOX if they wanted to. Any way you slice it, SCO is toast and won't be able to pay Novell back even a fraction of what they owe them.

Re:I hated SCO first

[mu51c10rd]

I admit I was a Caldera employee back when they purchased SCO and left Tarantella alone. The first thing that happened was most of the Utah-based employees were replaced by employees from CA. The company that was once Caldera was gutted after the acquisition and replaced by SCO. I left shortly thereafter and my department was laid off 6 months after I left, and was replaced by SCO's equivalent. It is unfortunate to see my former employer slammed all over the news, but the reality is that those who worked hard on Caldera's Linux distribution were removed after the buyout. The SCO Group has nothing to do with the old Caldera, other than retaining the geographic location.

SOX? Go after execs personally?

[walterbyrd]

I thought that was the idea of Sarbanes-Oxely, execs are not supposed to able to commit crimes and hide behind the company. Exec can be help personally liable.

Besides, scox paying novell is not the point. The point is to legally prove that Linux does not use proprietary UNIX technology, and to thereby stop the msft FUD.

The trial is significant because this trial has to be completed before the real trial can be held.

not SCO's money in the first place

[Nick Barnes]

This isn't money which "SCO owes Novell". This is Novell's money which SCO has retained (in breach of contract). The distinction seems trivial but should be important. In theory, it should give Novell priority over all other creditors (including the lawyers, accountants, and landlords with whom SCO has been merrily spending money since entering Chapter 11). The word "disgorgement" looms large in the future of this case. A pair of loose analogies should make the distinction clear: if I rob a bank, and then use the stolen money to hire expensive lawyers in a futile attempt to escape justice, the bank is entitled to recover that money from the lawyers. But if instead I borrow money from a bank and then spend it all on expensive lawyers on my way out of business, the bank is out of luck. The current situation is more like the former analogy than the latter. In selling Sys V licenses to Microsoft and Sun, TSCOG was acting as Novell's agent: the money was Novell's all along.

Re:SOX? Go after execs personally?

[techpawn]

I thought that was the idea of Sarbanes-Oxely

From my SOX experience it was just to create undue bureaucracy in IT department's of publicly traded companies and some other accounting nonsense to make sure the bean counters are actually counting beans that really exist and not saying the kidney beans are jelly beans. SOX wasn't to hold anyone reasonable in a corp when things went bad, it was a knee-jerk law in response to Enron. Like the PATRIOT ACT was to 9/11

I agree with Lewis Black on this one. You don't want another Enron, here's your law: If you can't explain, in one sentence, what it is that your company... DOES... it's illegal!

Not trolling, just having flashbacks! SOX makes me rock back and forth in a corner in the fetal position...

Re:Make the law firm pay Novell.

[CodeBuster]

Having done that, should they not be liable for SCO's debts?

Not unless the law firm made a separate personal guarantee (i.e. contract) to stand behind those debts and why would they have given that to SCOs creditors? There are no more responsible for the debts of the corporation than any of the other owners. That is the whole point of corporation, to prevent direct exposure to liability of the owners whether they be other corporations, private individuals, or shareholders (public traded company). Novel can suck whatever assets remain out of the dried husk of SCO until it crumbles into dust, but once the assets of the corporation are completely exhausted, the corporate headquarters sold, and the office furniture has been auctioned off the company files the dissolution paperwork (or their law firm does it) and the company ceases to exist as entity.

I think they should be made to experience the full consequences of their agreement.

People have been trying to pierce the veil of the corporation for generations now, but the courts have consistently upheld the separation of liability from the owners of the corporation and established many precedents. The modern world as we know it is based upon these abstractions and they will not be unwound short of crumpling the whole thing up and starting over which could be, well to put it nicely, messy like strawberry jam.